THE PRESIDENT: Thanks for the warm welcome. I'm honored to visit
the National Defense University. For nearly a century, the scholars
and students here have helped to prepare America for the changing
threats to our national security. Today, the men and women of our
National Defense University are helping to frame the strategies through
which we are fighting and winning the war on terror. Your Center for
Counterproliferation Research and your other institutes and colleges
are providing vital insight into the dangers of a new era. I want to
thank each one of you for devoting your talents and your energy to the
service of our great nation.

I want to thank General Michael Dunn for inviting me here. I used
to jog by this facility on a regular basis. Then my age kicked in.
(Laughter.) I appreciate Ambassador Wolfgang Ischinger, from Germany.
Mr. Ambassador, thank you for being here today. I see my friend,
George Shultz, a distinguished public servant and true patriot, with
us. George, thank you for coming; and Charlotte, it's good to see
you. I'm so honored that Dick Lugar is here with us today. Senator, I
appreciate you taking time and thanks for bringing Senator Saxby
Chambliss with you, as well. I appreciate the veterans who are here
and those on active duty. Thanks for letting me come by.

On September the 11th, 2001, America and the world witnessed a new
kind of war. We saw the great harm that a stateless network could
inflict upon our country, killers armed with box cutters, mace, and 19
airline tickets. Those attacks also raised the prospect of even worse
dangers -- of other weapons in the hands of other men. The greatest
threat before humanity today is the possibility of secret and sudden
attack with chemical or biological or radiological or nuclear weapons.

In the past, enemies of America required massed armies, and great
navies, powerful air forces to put our nation, our people, our friends
and allies at risk. In the Cold War, Americans lived under the threat
of weapons of mass destruction, but believed that deterrents made those
weapons a last resort. What has changed in the 21st century is that,
in the hands of terrorists, weapons of mass destruction would be a
first resort -- the preferred means to further their ideology of
suicide and random murder. These terrible weapons are becoming easier
to acquire, build, hide, and transport. Armed with a single vial of a
biological agent or a single nuclear weapon, small groups of fanatics,
or failing states, could gain the power to threaten great nations,
threaten the world peace.

America, and the entire civilized world, will face this threat for
decades to come. We must confront the danger with open eyes, and
unbending purpose. I have made clear to all the policy of this
nation: America will not permit terrorists and dangerous regimes to
threaten us with the world's most deadly weapons. (Applause.)

Meeting this duty has required changes in thinking and strategy.
Doctrines designed to contain empires, deter aggressive states, and
defeat massed armies cannot fully protect us from this new threat.
America faces the possibility of catastrophic attack from ballistic
missiles armed with weapons of mass destruction. So that is why we are
developing and deploying missile defenses to guard our people. The
best intelligence is necessary to win the war on terror and to stop
proliferation. So that is why I have established a commission that
will examine our intelligence capabilities and recommend ways to
improve and adapt them to detect new and emerging threats.

We're determined to confront those threats at the source. We will
stop these weapons from being acquired or built. We'll block them from
being transferred. We'll prevent them from ever being used. One
source of these weapons is dangerous and secretive regimes that build
weapons of mass destruction to intimidate their neighbors and force
their influence upon the world. These nations pose different
challenges; they require different strategies.

The former dictator of Iraq possessed and used weapons of mass
destruction against his own people. For 12 years, he defied the will
of the international community. He refused to disarm or account for
his illegal weapons and programs. He doubted our resolve to enforce
our word -- and now he sits in a prison cell, while his country moves
toward a democratic future. (Applause.)

To Iraq's east, the government of Iran is unwilling to abandon a
uranium enrichment program capable of producing material for nuclear
weapons. The United States is working with our allies and the
International Atomic Energy Agency to ensure that Iran meets its
commitments and does not develop nuclear weapons. (Applause.)

In the Pacific, North Korea has defied the world, has tested
long-range ballistic missiles, admitted its possession of nuclear
weapons, and now threatens to build more. Together with our partners
in Asia, America is insisting that North Korea completely, verifiably,
and irreversibly dismantle its nuclear programs.

America has consistently brought these threats to the attention of
international organizations. We're using every means of diplomacy to
answer them. As for my part, I will continue to speak clearly on these
threats. I will continue to call upon the world to confront these
dangers, and to end them. (Applause.)

In recent years, another path of proliferation has become clear, as
well. America and other nations are learning more about black-market
operatives who deal in equipment and expertise related to weapons of
mass destruction. These dealers are motivated by greed, or fanaticism,
or both. They find eager customers in outlaw regimes, which pay
millions for the parts and plans they need to speed up their weapons
programs. And with deadly technology and expertise going on the
market, there's the terrible possibility that terrorists groups could
obtain the ultimate weapons they desire most.

The extent and sophistication of such networks can be seen in the
case of a man named Abdul Qadeer Khan. This is the story as we know it
so far.

A. Q. Khan is known throughout the world as the father of
Pakistan's nuclear weapons program. What was not publicly known, until
recently, is that he also led an extensive international network for
the proliferation of nuclear technology and know-how.

For decades, Mr. Khan remained on the Pakistani government payroll,
earning a modest salary. Yet, he and his associates financed lavish
lifestyles through the sale of nuclear technologies and equipment to
outlaw regimes stretching from North Africa to the Korean Peninsula.

A. Q. Khan, himself, operated mostly out of Pakistan. He served as
director of the network, its leading scientific mind, as well as its
primary salesman. Over the past decade, he made frequent trips to
consult with his clients and to sell his expertise. He and his
associates sold the blueprints for centrifuges to enrich uranium, as
well as a nuclear design stolen from the Pakistani government. The
network sold uranium hexafluoride, the gas that the centrifuge process
can transform into enriched uranium for nuclear bombs. Khan and his
associates provided Iran and Libya and North Korea with designs for
Pakistan's older centrifuges, as well as designs for more advanced and
efficient models. The network also provided these countries with
components, and in some cases, with complete centrifuges.

To increase their profits, Khan and his associates used a factory
in Malaysia to manufacture key parts for centrifuges. Other necessary
parts were purchased through network operatives based in Europe, the
Middle East, and Africa. These procurement agents saw the trade in
nuclear technologies as a shortcut to personal wealth, and they set up
front companies to deceive legitimate firms into selling them tightly
controlled materials.

Khan's deputy -- a man named B.S.A. Tahir -- ran SMB computers, a
business in Dubai. Tahir used that computer company as a front for the
proliferation activities of the A. Q. Khan network. Tahir acted as
both the network's chief financial officer and money launderer. He was
also its shipping agent, using his computer firm as cover for the
movement of centrifuge parts to various clients. Tahir directed the
Malaysia facility to produce these parts based on Pakistani designs,
and then ordered the facility to ship the components to Dubai. Tahir
also arranged for parts acquired by other European procurement agents
to transit through Dubai for shipment to other customers.

This picture of the Khan network was pieced together over several
years by American and British intelligence officers. Our intelligence
services gradually uncovered this network's reach, and identified its
key experts and agents and money men. Operatives followed its
transactions, mapped the extent of its operations. They monitored the
travel of A. Q. Khan and senior associates. They shadowed members of
the network around the world, they recorded their conversations, they
penetrated their operations, we've uncovered their secrets. This work
involved high risk, and all Americans can be grateful for the hard work
and the dedication of our fine intelligence professionals. (Applause.)

Governments around the world worked closely with us to unravel the
Khan network, and to put an end to his criminal enterprise. A. Q. Khan
has confessed his crimes, and his top associates are out of business.
The government of Pakistan is interrogating the network's members,
learning critical details that will help them prevent it from ever
operating again. President Musharraf has promised to share all the
information he learns about the Khan network, and has assured us that
his country will never again be a source of proliferation.

Mr. Tahir is in Malaysia, where authorities are investigating his
activities. Malaysian authorities have assured us that the factory the
network used is no longer producing centrifuge parts. Other members of
the network remain at large. One by one, they will be found, and their
careers in the weapons trade will be ended.

As a result of our penetration of the network, American and the
British intelligence identified a shipment of advanced centrifuge parts
manufactured at the Malaysia facility. We followed the shipment of
these parts to Dubai, and watched as they were transferred to the BBC
China, a German-owned ship. After the ship passed through the Suez
Canal, bound for Libya, it was stopped by German and Italian
authorities. They found several containers, each forty feet in length,
listed on the ship's manifest as full of "used machine parts." In
fact, these containers were filled with parts of sophisticated
centrifuges.

The interception of the BBC China came as Libyan and British and
American officials were discussing the possibility of Libya ending its
WMD programs. The United States and Britain confronted Libyan
officials with this evidence of an active and illegal nuclear program.
About two months ago, Libya's leader voluntarily agreed to end his
nuclear and chemical weapons programs, not to pursue biological
weapons, and to permit thorough inspections by the International Atomic
Energy Agency and the Organization for the Prohibition of Chemical
Weapons. We're now working in partnership with these organizations and
with the United Kingdom to help the government of Libya dismantle those
programs and eliminate all dangerous materials.

Colonel Ghadafi made the right decision, and the world will be
safer once his commitment is fulfilled. We expect other regimes to
follow his example. Abandoning the pursuit of illegal weapons can lead
to better relations with the United States, and other free nations.
Continuing to seek those weapons will not bring security or
international prestige, but only political isolation, economic
hardship, and other unwelcome consequences. (Applause.)

We know that Libya was not the only customer of the Khan network.
Other countries expressed great interest in their services. These
regimes and other proliferators like Khan should know: We and our
friends are determined to protect our people and the world from
proliferation. (Applause.)

Breaking this network is one major success in a broad-based effort
to stop the spread of terrible weapons. We're adjusting our strategies
to the threats of a new era. America and the nations of Australia,
France and Germany, Italy and Japan, the Netherlands, Poland, Portugal,
Spain and the United Kingdom have launched the Proliferation Security
Initiative to interdict lethal materials in transit. Our nations are
sharing intelligence information, tracking suspect international cargo,
conducting joint military exercises. We're prepared to search planes
and ships, to seize weapons and missiles and equipment that raise
proliferation concerns, just as we did in stopping the dangerous cargo
on the BBC China before it reached Libya. Three more governments --
Canada and Singapore and Norway -- will be participating in this
initiative. We'll continue to expand the core group of PSI countries.
And as PSI grows, proliferators will find it harder than ever to trade
in illicit weapons.

There is a consensus among nations that proliferation cannot be
tolerated. Yet this consensus means little unless it is translated
into action. Every civilized nation has a stake in preventing the
spread of weapons of mass destruction. These materials and
technologies, and the people who traffic in them, cross many borders.
To stop this trade, the nations of the world must be strong and
determined. We must work together, we must act effectively. Today, I
announce seven proposals to strengthen the world's efforts to stop the
spread of deadly weapons.

First, I propose that the work of the Proliferation Security
Initiative be expanded to address more than shipments and transfers.
Building on the tools we've developed to fight terrorists, we can take
direct action against proliferation networks. We need greater
cooperation not just among intelligence and military services, but in
law enforcement, as well. PSI participants and other willing nations
should use the Interpol and all other means to bring to justice those
who traffic in deadly weapons, to shut down their labs, to seize their
materials, to freeze their assets. We must act on every lead. We will
find the middlemen, the suppliers and the buyers. Our message to
proliferators must be consistent and it must be clear: We will find
you, and we're not going to rest until you are stopped. (Applause.)

Second, I call on all nations to strengthen the laws and
international controls that govern proliferation. At the U.N. last
fall, I proposed a new Security Council resolution requiring all states
to criminalize proliferation, enact strict export controls, and secure
all sensitive materials within their borders. The Security Council
should pass this proposal quickly. And when they do, America stands
ready to help other governments to draft and enforce the new laws that
will help us deal with proliferation.

Third, I propose to expand our efforts to keep weapons from the
Cold War and other dangerous materials out of the wrong hands. In
1991, Congress passed the Nunn-Lugar legislation. Senator Lugar had a
clear vision, along with Senator Nunn, about what to do with the old
Soviet Union. Under this program, we're helping former Soviet states
find productive employment for former weapons scientists. We're
dismantling, destroying and securing weapons and materials left over
from the Soviet WMD arsenal. We have more work to do there.

And as a result of the G-8 Summit in 2002, we agreed to provide $20
billion over 10 years -- half of it from the United States -- to
support such programs. We should expand this cooperation elsewhere in
the world. We will retain [sic] WMD scientists and technicians in
countries like Iraq and Libya. We will help nations end the use of
weapons-grade uranium in research reactors. I urge more nations to
contribute to these efforts. The nations of the world must do all we
can to secure and eliminate nuclear and chemical and biological and
radiological materials.

As we track and destroy these networks, we must also prevent
governments from developing nuclear weapons under false pretenses. The
Nuclear Non-Proliferation Treaty was designed more than 30 years ago to
prevent the spread of nuclear weapons beyond those states which already
possessed them. Under this treaty, nuclear states agreed to help
non-nuclear states develop peaceful atomic energy if they renounced the
pursuit of nuclear weapons. But the treaty has a loophole which has
been exploited by nations such as North Korea and Iran. These regimes
are allowed to produce nuclear material that can be used to build bombs
under the cover of civilian nuclear programs.

So today, as a fourth step, I propose a way to close the loophole.
The world must create a safe, orderly system to field civilian nuclear
plants without adding to the danger of weapons proliferation. The
world's leading nuclear exporters should ensure that states have
reliable access at reasonable cost to fuel for civilian reactors, so
long as those states renounce enrichment and reprocessing. Enrichment
and reprocessing are not necessary for nations seeking to harness
nuclear energy for peaceful purposes.

The 40 nations of the Nuclear Suppliers Group should refuse to sell
enrichment and reprocessing equipment and technologies to any state
that does not already possess full-scale, functioning enrichment and
reprocessing plants. (Applause.) This step will prevent new states
from developing the means to produce fissile material for nuclear
bombs. Proliferators must not be allowed to cynically manipulate the
NPT to acquire the material and infrastructure necessary for
manufacturing illegal weapons.

For international norms to be effective, they must be enforced. It
is the charge of the International Atomic Energy Agency to uncover
banned nuclear activity around the world and report those violations to
the U.N. Security Council. We must ensure that the IAEA has all the
tools it needs to fulfill its essential mandate. America and other
nations support what is called the Additional Protocol, which requires
states to declare a broad range of nuclear activities and facilities,
and allow the IAEA to inspect those facilities.

As a fifth step, I propose that by next year, only states that have
signed the Additional Protocol be allowed to import equipment for their
civilian nuclear programs. Nations that are serious about fighting
proliferation will approve and implement the Additional Protocol. I've
submitted the Additional Protocol to the Senate. I urge the Senate to
consent immediately to its ratification.

We must also ensure that IAEA is organized to take action when
action is required. So, a sixth step, I propose the creation of a
special committee of the IAEA Board which will focus intensively on
safeguards and verification. This committee, made up of governments in
good standing with the IAEA, will strengthen the capability of the IAEA
to ensure that nations comply with their international obligations.

And, finally, countries under investigation for violating nuclear
non-proliferation obligations are currently allowed to serve on the
IAEA Board of Governors. For instance, Iran -- a country suspected of
maintaining an extensive nuclear weapons program -- recently completed
a two-year term on the Board. Allowing potential violators to serve on
the Board creates an unacceptable barrier to effective action. No
state under investigation for proliferation violations should be
allowed to serve on the IAEA Board of Governors -- or on the new
special committee. And any state currently on the Board that comes
under investigation should be suspended from the Board. The integrity
and mission of the IAEA depends on this simple principle: Those
actively breaking the rules should not be entrusted with enforcing the
rules. (Applause.)

As we move forward to address these challenges we will consult with
our friends and allies on all these new measures. We will listen to
their ideas. Together we will defend the safety of all nations and
preserve the peace of the world.

Over the last two years, a great coalition has come together to
defeat terrorism and to oppose the spread of weapons of mass
destruction -- the inseparable commitments of the war on terror. We've
shown that proliferators can be discovered and can be stopped. We've
shown that for regimes that choose defiance, there are serious
consequences. The way ahead is not easy, but it is clear. We will
proceed as if the lives of our citizens depend on our vigilance,
because they do. Terrorists and terror states are in a race for
weapons of mass murder, a race they must lose. (Applause.) Terrorists
are resourceful; we're more resourceful. They're determined; we must
be more determined. We will never lose focus or resolve. We'll be
unrelenting in the defense of free nations, and rise to the hard
demands of dangerous times.